UAE's soaring wealth: A glance at the $1.3 trillion projection by 2027

The UAE has long been a global hub for prosperity and economic growth.

A recent report from the Boston Consulting Group sheds light on the UAE’s anticipated financial growth, with a projected Compound Annual Growth Rate (CAGR) of 5.5% in new wealth.

The report projects growth by 2027, and suggests that the UAE's wealth is set to surge from $1 trillion to $1.3 trillion, by the 'Global Wealth Report 2023: Resetting the Course.'

So, here’s everything we know!

The report states the diverse landscape of wealth in the UAE.

In 2022, equities and investment funds reigned supreme, as they constituted a significant 58% of total personal wealth. However, bonds are forecasted to witness the most rapid growth, boasting an impressive CAGR of 8.4% from 2022 to 2027.

Furthermore, life insurance and pensions are anticipated to evolve into the third-largest asset class by 2027. BCG's Managing Director and Partner, Mohammad Khan, attributes this substantial growth to the UAE's compelling value proposition for high-net-worth individuals (HNWIs).

The influence of ultra-high net worth individuals (UHNWIs)

The report also explores the monumental contribution of Ultra-High Net Worth (UHNW) individuals, those with assets exceeding $100 million, in different sectors including real estate, stocks and more.

In 2022, these elite wealth holders accounted for approximately 25% of the UAE's financial wealth, a trend set to continue until 2027. Meanwhile, individuals with wealth ranging from $1 million to $20 million held 32% of the UAE's wealth in 2022 which is projected to increase to 34% by 2027.

Balanced growth in assets and liabilities

The UAE's real assets and liabilities experienced a robust growth, expanding by 7.5% annually from 2017 to 2022, which brought it up to a substantial $1.9 trillion.

Based on this data, projections indicate that these assets will continue their upward momentum, increasing by 6.9% per year, ultimately reaching the $2.6 trillion mark by 2027.

Revolutionising wealth management

The report also dives into wealth management, offering eight key initiatives to attain sustainable profitability in the sector. These encompass scalable client acquisition, the introduction of private-market offerings, a focus on fixed-income products, and the integration of generative artificial intelligence (GenAI) in financial advisory services.

On the cost-efficiency front, the report advocates strategies such as end-to-end (E2E) process reviews, informed shoring decisions, utilisation of third-party tech solutions, and simplifying products and services to streamline operations and cater to diverse client needs.

How impressive!

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